FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
AND EXCHANGE ACT OF 1934
For the transition period from
Commission file number 33-24299
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
(Exact name of registrant as specified in its charter)
Colorado 93-0962072
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5525 Erindale Drive, Suite 201
Colorado Springs, Colorado 80918
(Address of principal executive offices) (Zip Code)
(719) 260-8509
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes XX No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
Class of Stock Amount Outstanding
$.0001 par value 1,529,546 shares outstanding
Common Stock at June 24, 1996
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
Index
Part I - FINANCIAL INFORMATION
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations
Part II - OTHER INFORMATION
SIGNATURES
Consolidated Capital of North America, Inc.
Consolidated Balance Sheet
Unaudited
March December
31, 1996 31, 1995
ASSETS
Current Assets:
Cash And Cash Equivalents $3,446 $6,494
Notes Receivable & Accrued Interest 149,415 162,173
Notes Receivable & Accrued Interest -
Related Party 159,633 143,609
Total Current Assets 312,494 312,276
Undeveloped Real Estate, at cost 284,687 284,687
Equity Investment And Advances 0 0
Other Assets:
Long-Term Portion Of Notes Receivable 0 84,240
Equipment Held For Resale 25,209 25,209
Prepaid Expenses 4,813 6,166
Marketable Securities 37,500 37,500
Total 67,522 153,115
TOTAL ASSETS $664,703 $750,078
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Current Liabilities:
Current Portion - Notes Payable $112,000 $193,000
Current Portion - Notes Payable
- - - Related Parties 12,524 11,700
Accounts Payable - Trade 29,939 28,631
Accrued Expenses 35,611 26,348
Total 190,074 259,679
Long-Term Portion Of Notes Payable 0 0
Total Liabilities 190,074 259,679
Minority Interest 124,172 124,172
SHAREHOLDERS' EQUITY:
Preferred Stock, Par Value $.01 Per Share;
Authorized 10,000,000 Shares; None outstanding
Common Stock, $.0001 Par Value; Authorized
50,000,000 Shares; Issued and outstanding shares
1,529,546 and 1,529,546 shares 153 153
Additional Paid-In Capital 832,075 832,075
Accumulated Deficit (481,771) (466,001)
TOTAL SHAREHOLDERS' EQUITY 350,457 366,227
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $664,703 $750,078
See Accompanying Notes To These Consolidated Financial Statements.
Consolidated Capital of North America, Inc.
Unaudited
Consolidated Statement Of Operations
Three Months Three Months
Ended Ended
March 31 March 31
1996 1995
Revenue:
Sale Of Real Estate $0 $0
Cost Of Real Estate Sold 0 0
Gross Profit From Sales 0 0
Depreciation And Amortization 1,353 0
General And Administrative 7,994 7,447
Interest 5,350 12,041
Personnel And Consulting, related parties 9,000 13250
Taxes - Payroll & Property 67 0
Total Expenses 23,764 32,738
Operating Profit (Loss) (23,764) (32,738)
Other Income (Expense):
Minority Interest In Loss Of Joint Venture 3,264 4,420
Equity (Loss) In Affiliates 0 (8,141)
Gain On Sale Of Affiliates 0 0
Interest 7,994 0
Other 0 18,639
Total 11,258 14,918
Net Income ($12,506) ($17,820)
Net Income Per Common Share ($0.01) ($0.01)
Common Shares Outstanding 1,529,546 1,304,546
See Accompanying Notes To These Consolidated Financial Statements.
Consolidated Capital of North America, Inc.
Unaudited
Consolidated Cash Flow Statement
Three Months Three Months
Ended Ended
March 31 March 31
1996 1995
Cash Flows From Operating Activities:
Net (Loss) ($12,506) ($17,820)
Amortization And Depreciation 1,353 0
Equity Loss In Affiliate 0 8,141
Minority Interest In (Loss) (3,264) (4,420)
(Increase) In Accounts Receivable 0 (824)
(Increase) In Interest Receivable (8,002) 0
Increase (Decrease) In Accounts Payable 1,308 (35,311)
Increase (Decrease) In Accrued Expenses 9,263 0
Net Cash Flows From Operations (11,848) (50,234)
Cash Flows From Investing Activities:
Proceeds From Sale Of Assets 0 3,000
Collections Of Notes Receivable 105,000 72,000
Advances To Related Parties (16,024) 0
Purchase Of Equity Investments 0 (1,973)
Purchase Of Land 0 (13,362)
Net Cash Flows Provided By Investing: 88,976 59,665
Cash Flows From Financing Activities:
Proceeds From Borrowing 824 115,000
Payments Of Debt (81,000) (92,600)
Distributions To Joint Venture Partners 0 (29,603)
Net Cash Flows Provided By Financing (80,176) (7,203)
Net Increase (Decrease) In Cash (3,048) 2,228
Cash At Beginning Of Period 6,494 1,676
Cash At End Of Period $3,446 $3,904
Supplementary Disclosure Of Cash Flow Information
Noncash Financing Activities: $0 $0
See Accompanying Notes To These Consolidated Financial Statements.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
1. Unaudited Information. The information furnished herein was taken from
the books and records of the Company without audit. The Company believes,
however, that it has made all adjustments necessary to reflect properly the
results of operations for the interim periods presented. The adjustments
consist only of normal reoccurring accruals. The results of operations for
the three month period ended March 31, 1996, are not necessarily indicative
of the results to be expected for the year ended December 31, 1996.
2. Notes. Management has elected to omit substantially all notes to the
Company's financial statements. Reference is made to the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1995, as this Report
incorporates the notes to the Company's year end financial statements.
3. Termination of Development Stage Status. Management has determined
that the Company is no longer in the development stage and has therefore
not included the additional financial information required by FASB 7.
4. Stock Split. All references to Common Stock outstanding have been
adjusted retroactively to reflect a 200-for-1 reverse stock split effective
January 15, 1991.
5. Basis of Presentation. The Company was incorporated under the laws of
the State of Delaware on November 24, 1987, and reincorporated as a Colorado
corporation on March 17, 1992. The Company's primary business is in the real
estate industry.
6. Equity Investment. The Company formerly accounted for its interest in
investments for which it had less than a 50% interest under the equity
method. Under this method, the Company's proportionate share of the equity
investment's income or loss either increased or decreased the Company's
investment. As of December 31, 1995, the Company discontinued using the
equity method because its share of the investee's losses reduced the
investment below zero.
7. Bear Star Limited Liability Company. During 1995, notes receivable of
the Company were assigned to Bear Star in connection with the reorganization
of that entity. This reorganization resulted in the Company owning
approximately 19% of Bear Star (as compared to an indirect interest of 12%
in 1994) and acquiring a note receivable of $22,897 from Columbine. Bear
Star is organized to sell developed and undeveloped homesites.
The Company's original indirect interest in Bear Star was acquired
through advances of approximately $114,000. Bear Star has substantial
obligations, including notes payable of $2,164,534 as of March 31, 1996.
In addition, certain improvements must be made to the property prior to the
sale of lots for modular homes. The Company has not guaranteed these
obligations but the ultimate realization of its advances will be dependent
upon Bear Star's satisfaction of such obligations and the ability to raise
capital for the improvements to the property. The Company believes financial
commitments from other members of Bear Star, as well as future sales of
Bear Star homesites to other sales companies will enable it to meet such
obligations.
CONSOLIDATED CAPITAL OF NORTH AMERICA, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
The liquidity and capital resources of Consolidated Capital of North
America, Inc. (the "Company") increased slightly from fiscal year end
December 31, 1995. The Company's working capital of $122,420 at March 31,
1996 represents an increase of $69,823 from December 31, 1995. This
increase is attributable to the receipt of proceeds of the sale of certain
real estate consummated in fiscal year 1995 and a concurrent reduction of
a note payable. Despite this increase in working capital, however, the
Company requires additional liquidity, as it had no cash and accounts payable
approximately of $30,000, accrued expenses of approximately $36,000 and
notes payable of $112,000 at March 31, 1996. As discussed in the Notes to
Unaudited Financial Statements, management does not anticipate repayment of
any advances from Bear Star pending sale of additional lots in that
development. Accordingly, the Company will be dependent upon collection of
notes receivable from purchasers of portions of the Northcrest property.
The Company continues to require capital from outside sources to
attain profitable operation and fulfill its business plan. Management
anticipates that while the Company's current assets and undeveloped real
estate are sufficient to satisfy existing liabilities, the Company will not
attain profitable operations on a consistent basis without additional
assets and increased revenue. In order to meet that objective, management
is considering additional mergers, acquisitions, or other reorganizations
to expand operations.
Results of Operations
For the three months ended March 31, 1996, the Company realized a net
loss of $12,506 on no revenues. The results of operations for the three
months ended March 31, 1996 were substantially similar to the results for
the three months ended March 31, 1995, during which the Company lost
$17,820. The only revenues anticipated by the Company are from sales of
remaining portions of the Northcrest or Bear Star properties. Since the
Company did not record any sales during the first three months of fiscal
1996, no revenues were realized. Pursuant to a contract executed in the
second quarter of fiscal 1996, the Company closed the remaining Northcrest
property on June 24, 1996, to be reported in the second fiscal quarter.
Expenses were reduced slightly during the first three months of 1996
as compared to the comparable period of 1995, to $23,764 from $32,738,
respectively. A reduction in interest and personnel expenses represented
the greatest portion of that reduction. The Company accrued an interest
receivable of approximately $8,000 from Bear Star L.L.C., Glacier Valley
Holding Corporation, Columbine Home Sales L.L.C. and JBS Corporation,
helping to reduce the losses for the quarter.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Not applicable.
Item 2. Changes in Securities.
Not applicable.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 5. Other Information.
Not applicable.
Item 6. Exhibits and Reports on Form 8-K.
A. Exhibits: None.
B. Reports on Form 8-K: None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Consolidated Capital of North America, Inc.
(Registrant)
Date: June 28, 1996 \s\Raymond E. McElhaney
By:Raymond E. McElhaney
President/Treasurer, Chief Executive Officer
Financial Officer and
Chairman of the Board of Directors
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THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE 3/31/96 FORM
10-QSB AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FORM 10-QSB.
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